Vedanta Iron & Steel subsidiary ESL Steel Limited received an adjudication order from the Registrar of Companies, Ranchi, on August 25, 2026. The order addresses alleged non-compliance in director remuneration disclosures for financial years 2015-16 to 2017-18.

The adjudication pertains to violations of Section 197(15) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Specifically, the matter involves the alleged non-disclosure of the ratio of directors' remuneration to median employee remuneration in the Board's Report or Corporate Governance Report.

Penalty Exemption

Under Section 32A of the Insolvency and Bankruptcy Code (IBC), 2016, ESL Steel is exempted from any monetary penalty associated with this adjudication. The order concludes the proceedings for the company. However, ex-directors have accepted penalties as mentioned in the notices and undertake to remit them as directed by the Adjudicating Officer.

This disclosure was made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, along with Sub-para (8) of Para B of Part A of Schedule III.

What the Numbers Show

The adjudication highlights a regulatory distinction between corporate liability and individual accountability during insolvency proceedings. While the corporate debtor (ESL Steel) is shielded from financial penalties due to its status under the IBC 2016, the personal liability of ex-directors remains intact. This separation ensures that compliance failures from the FY15-17 period do not impact the company's current balance sheet, though they result in personal financial obligations for former management.

Vedanta Iron & Steel Limited disclosed that its subsidiary, ESL Steel Limited, has received a demand-cum-show cause notice from the GST Department in Ranchi. The notice alleges short payment of taxes during FY21 to FY23.

The Office of the Joint Commissioner, Central Goods and Service Tax & Central Excise, Ranchi, issued the notice under Section 74(1) of the Central Goods and Services Tax Act, 2017 on August 25, 2026.

Notice Details

The department proposes a total GST demand of ₹15,74,26,450. This amount comprises:

The notice also includes applicable interest and penalty. The allegation pertains to short payments under the Reverse Charge Mechanism (RCM) during the fiscal years 2020-21 to 2022-23.

Company Response

ESL Steel is examining the notice and intends to take appropriate legal steps within prescribed timelines. Vedanta Iron & Steel stated it does not envisage any significant financial or operational impact on the group due to this development.

This disclosure follows an earlier intimation dated August 10, 2026, regarding the same matter.